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Us 3, Romney 3, S&p 3, Ronald Reagan 2, New York 2, Cialis 2, Cnn 2, Cain 1, Michele Bachmann 1, Karl Marx 1, Christine Romans 1, Mr. Romney 1, Ben Barber 1, Itb 1, United States 1, Moo 1, Honda 1, Teague 1, Mitt Romney 1, Ben 1,
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  CNN    Your Bottom Line    News/Business.  
   Financial advice. New.  

    September 22, 2012
    6:30 - 7:00am PDT  

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drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. are you a maker or a taker? or do you believe in redistribution? these are false choices, folks. good morning, everyone.
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i'm christine romans. career politicians though see it oh, so clearly. >> this week we learned mitt romney only wants to be president of half of the united states. >> president obama said that he believes in redistribution. >> we're all smarter than that, aren't we? you know it's not so simple. taxes, entitlement, debt, all three of these things must work together and keeping the status quo on all three of these things is impossible. the parties blame each other, and this is about the only thing they are 100% right on because they both took us here, and this is not an issue that gets settled in less than 50 days. 12.5 million people are still out of work. economic growth alone won't save us. it's forecast to only slowly increase over the next few years. will cain is a cnn contributor and ban barber is a graduate scholar in the city of new york. romney's comments caught on
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hidden camera divided the country into two groups, makers and takers. i refuse to believe the campaign is between winner take owl and karl marx. >> where we try to place these candidates on the spectrum. here's the sin that mitt romney committed dividing americans into 47 versus 53. economic conservatism applies to 100%, making the rich better off, not the poor better off. more poor people has been mutt out of poverty about the free market system, that's the one i want to hear mitt romney. >> and pulled more people out of the tax rolls. something the republicans have done for years and romney isnot sounding like ronald reagan. ronald reagan in 1986 after cutting taxes for the working poor. >> the bill i'm signing today is not only an historic overhaul of
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our tax code and a sweeping victory for fairness, it's also the best anti-poverty bill, the best pro-family measure and the best job creation program ever to come out of the congress of the united states. >> okay. ben. that tax reform resulted in fewer people paying taxes. >> it did indeed, and it was the beginning of 30, 35 years of a market etiology in which our assumption was if we reduce the means with which government operates we're going to improve the economic fortunes of the country. that simply has not happened, and, in fact, what we've seen is we've seen tax rates go down, down, down. they were 90%, 80% on the rich in the '50s during the clinton era and 28%. today they are around 18%, but most of the rich like romney don't pay that. they pay even less so what we have is a trickle up theory. give tax breaks to the rich and they will take the money, and they will do things, not jobs. they say they will create jobs, but that's in the in fact what they do. >> okay. >> all through the bush years,
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all through the bush years taxes, you know, they -- they were given back to the rich and we lost jobs. the great recession happened under bush's watch with his tax policies in place. >> okay. so ben care tid one step further to a conspiracy. one that i won't disagree with to start. let's say this. you're right. republicans are responsible for putting in place the earned income tax cred wind and reducing the level of taxation on the poor so it's a little disheartening to hear michele bachmann or mitt romney in the speech suggest it's a problem that so many people don't pay taxes. what we want is fewer people paying taxes, and those that day paying less. ben said that's a concerted theory to starve the beast and starve the government. we think morally and economically it's a better system when people pay less in taxes and that should accompany less spinning. >> all this redistribution of wealth stuff. the president wants to redistribute the wealth in the country and that's what the republican talking point is, and we have a chart i want to show. doesn't the tax code. >> what i was just talking
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out. >> isn't that what it does, redistributes the wealth. >> progressive taxes. >> these shady areas, guys, these are where there have been -- you can come along, it's already. republican presidents, the red shaded areas. earned income tax credit, look at all the taxpayers not paying. moochers and deadbeats. just the way it works. >> your chart illustrates the point i just made. republicans are responsible for ushering in the earned income tax credit and reducing the number of paying federal income taxes. >> yand they are being attacked by mr. romney as being moochers. he's playing to a conservative script. >> we can't be nostradamus, has to listen to what he says and say that's what he thinks. if we want to think he's a dis-sembler or lying, but i'm not going to say that. he doesn't believe in the earned income tax which has taken a lot of people off the tax rolls for reasons ronald reagan prudently predicted. >> we don't know what he would
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do. >> he hasn't said. >> i don't know what he would do with those things. >> i don't want to make the same mistake among the three of us here that mitt romney made and that's conflating certain groups. saying 47% of people don't pay taxes is not the same thing as teague there are takers in the society. what percentage of people are actually dependant on the government, not as high as 47%, not nearly as high, but those are two different groups, those that get checks from the government and don't pay taxes and the third group romney conflated, those will vote for president obama. >> what happens to taxes, my question, don't want to steal too much of our thunder from what will happen after the break, but what happens to taxes from here? the way i look at it we can't afford ourselves at the moment. what happens here? >> that's right. we can't afford it. we can't afford it because we're not paying for it. i want that car but i'm unwilling to pay for. it depends on how much we want to pay. if we paid into our government to do the things together we can't do alone the asets that made available to that government to do all the things we wanted it to do, we'd be just
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fine but what we want and most americans want is a lot of services from government, the ones this get, and they don't want to pay for it. >> what's going to happen, taxes go up on everyone. >> bottom line, too, all makers and takers. >> we are. >> the whole country. >> we make hamburgers, don't just make for profits and pay for profits the way romney did in bain, we make cars, hamburgers, sermons, art and those are worthwhile even though they don't make big profits. >> the republican -- the republican and democratic talking points, the makers and takers, redistributionists, we're all of those things. don't move. both staying here. how can romney or obama make cuts without hurting the recovery or taking too much from those in need? the emergency money has been handed out, but do any of these guys have an exit strategy that makes sense? i've discovered gold.
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more convenient and more rewarding. it's the reason why we don't have costumers. we have members. american express. welcome in. governor mitt romney's comments at a fund-raiser have opened the door to the most important discussion this country should be having, food stamps, extended jobless benefits, stimulus projects, tax cuts, emergency aid for an economy not growing strongly enough, but how will we know when the emergency is over in the government can't sustain this forever, right in the debt is racking up daily, more than $16 trillion now and counting, and how do we pay for this? and when do we start? ben barber and will cain are back with us now. if you give a person pain medication, at some point they become addicted to it. have you to stop giving them
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medication when the patient gets better. when does that happen? >> happens with medication but not government spending. when the government spending is authorized by the american people. >> don't think we're addicted to. >> we're addicted to our defense budget which is always exempted from anything. $4 trillion, $5 trillion has gone out under obama, part of what happened. i agree with will on that, but 3 trillion of that went to the iraqi war, 3 trillion. we got out of iraq, and you see today our being there did very little good despite the horrendous losses. >> the fiscal cliff will take care of the defense spending. >> we've got to hit not just discretionary spending for health and welfare and education and transportation that we all benefit from, we've got to hit those areas like atomic weapons whe we still are fighting the cold war so there's a lot that can be done to reduce taxes without cutting into the things that we really care about. >> let's show the federal government budget breakdown. the biggest part of the government breakdown, medicare, social curity, defense are next and the other safety net
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programs, food stamps and affordable housing and interest payments on our debt, incredibly important. everything else goes into the remaining 20%. we'll grant hypothetical second term to obama, what do you start cutting, compassionately what do you start cuting? >> i don't know that you can cut compassionately and i don't know if obama will cut at all. this spending has been sanctioned by the american people, that they have said they wanted that high level of spending. they have also said continuously they want low levels of taxations so they have made two choices they cannot have so what needs to be presented is an either/or. you don't get to have both and that day of reckoning is coming. it will come from the bondholders, the markets and it will come from slow economic growth. >> not here yet, but interesting economists, you and i both like, like ken rogoff who suggested that premise of growing debt has a pressing effect on the commit regardless of whether or not you can continue it. the day of reckoning is coming and then we'll find out. do they want that high level of
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spending or low taxation? >> the day of reckoning is actually going to be here on november 6th. that's the day of reckoning because the american people will get a choice for those things and the choice is very clear. one side is saying cut particularly discretionary spending, increase the defense budget despite the fact that the department of defense hasn't asked for that and cut expenditures and cut taxes on the wealthy. that's what they are saying. the other choices, keep that remarkable historical balance between government spending and government work and free enterprise, and the balance between the two is what makes this country great, but when free enterprise begins to say we don't want government regulation, we don't want taxes, we don't want nothing, that's when things get out of kilter and that's the choice we have on november 6. >> isn't the real choice the beginning of the year with the fiscal cliff. whoever is president has to get the congress to go along with them to figure out what to do. >> the fiscal cliff is the small choice. the big choice remains beyond the fiscal cliff. >> fiscal cliff holding back hiring, keeping the unemployment rate higher than it should be. >> a real difference between
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talking about the potential economic effect of the fiscal cliff in dealing with our debt and deficit problem, two different conversations. agree with something ben said, cannot balance the federal budget and cannot cut it based upon the discretionary budget at all. you have to address the fat where the fat is. how do you do that in ent tamts, talk about raising the age of social surity and the age of medicare. >> yes, yes and yes. >> will and i agree on that. >> people live longer these days. >> can't do that in an election year. >> not at all. >> somebody always trying to get elected. >> people want their stuff. they want their stuff and they don't want to pay for it. >> let's look at some of the things with the safety net. 26% are using medicaid. 15% on food stamps, 8% are using something called the food aid for women, infants and children. 4% housing assistance and 2% receive aid to needy families. other safety nets, not the big entitlement programs. this is appropriate. you keep this, but you wittle away at the other things, the very, very -- >> this can't remain.
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can't continue to have the number of theme on food stamps that we have today. you suggested earlier this was response to an economic recession, economic crisis. you ask a good questions. >> do you think they are addict sniff. >> of course they are. >> how do you get yourself out of these situations. the course of government growth only goes in one dirtion. >> a dirty little secret. to the redistributionist, the complaining about redistribution. the redistribution in this country goes from blue states to red states. the people who want it down are the ones who get it, the south receives much more from the government than it gives in taxes. the north and big cities give far more in taxes. yes, money is being redistributed. being redistributed from blue to red, and it's also by the way being redistributed upwards, that is to say being redistributed so that in new york this week we just learned that the top 20% make 40 times what the bottom 20% make. now someone -- you know, nobody -- i don't think anybody can justify a 40 times, 40
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factor. >> i don't feel the need to. >> and so we tax a little more for those people to help the other folks, but the reality is more taxes go to republican states than come from republican states, so this crazy acemetery in which the republicans complain about redistribution, the funds are being redistributed to the rich with lower taxes and redistributed to southern states that are poor and need government assistance. >> president obama just can't tax the rich and governor romney just can't cut his way out of this. >> right. >> when do we start getting the real conversation about how to fix it? >> i saw senator tom coburn say this. the politicians only make hard choices that above pain when the pain of not making a choice is worse. >> that's so true. there's some level of agreement. the middle class will have to have the taxes raised in order to maintain the level of spending that they want or have to give up the spending in order to maintain the tax rates they suggest they want. then -- then the politicians will make that choice at the
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last possible minute. >> the other thing that's going to happen is that after november 6th when president obama is re-elected, and that will happen, i'm predicting it here, can you check me later, when that happens the republicans who have spent the last four years trying to unseat him will realize he's now in for four years and hasn't benefited them to be the resisters, and i think will you see after his re-election, i think you will see some fairly serious compromising. i think you'll see the center of the republican party take the party back from the far right and at that point we may actually get some stuff done. >> that's a bold prediction on both counts. nice to see both of you. the u.s. stock market is soaring. have you missed your chance to make some money? we're going to tell you how to invest the smart way. that means without emotion, next. i mean you feel me right? yeah. uh, sir... ah... [ male announcer ] layaway's back. earlier than ever. through december 14th. walmart.
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what if i told you that since president obama took office, the s&p 500 is up 80%. you could be back where you were before the recession hit, but you're not. you see, many average investors pulled out of the market. so who's making money? well, institutional investors with deep pockets, professional money managers and high frequency traders. so is it too late for you to get in now? depends on who you ask. experts are pretty much split 50/50 on which way the money is headed. cnn's fear and greed index analyzes the emotions that run the market. right now, extreme greed is moving wall street. warren buffett would tell you it's time to run and hide. >> you want to be greedy when others are fearful and fearful when others are greedy. it's that simple. >> it's so simple, but so difficult at the same time. the federal reserve announced it's holding interest rates at
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record lows. is there anywhere for you to put your money right now? matt mc call is president of pin financial group. should they get in right now? >> i think you want to get in right now. you take a look at what's going on in this market. you have the s&p 500 just off a five-year high. the nasdaq just last week hit the highest level in a decade. most investors are sitting on the sidelines. you want to get in now because the federal reserve came up with what we call qe3, their third quantitative easing. the stock market went up gang busters last time. up 80% since president obama took office. this time, they're throwing money at you. you have to be in the market to collect that money. >> that's what qe-3 is, quantitative easing. that's been helping a lot of different markets. so if you are a stock investor, a typical stock investor, how do you ease in? >> you have to look at the market in a long testify term
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trend, because if you're looking to try to play the news from day-to-day, you'll be buying stocks, selling stocks. you want to look long-term, you want to look at solid companies. you look at the s&p 500, for example. it's been one of the best performing indexes compared to all others around the world. a lot of people think emerging markets are better. the united states has been one of the best performers. >> you like the construction industry, so if the fed is going to keep interest rates low and there's a housing recovery is that one reason why you could have a play there? >> plus we have mortgage rates. the numbers just came out this week. lowest ever. so if people are going to be out there buying a house this is when it's going to happen. we have inventories dropping, which means home prices go up and the home builders have been really bustling lately. i think we have to ride that train as long as you can. and qe-3 makes it attractive. they're spending $40 billion a month buying into mortgages. >> and you have an exchange traded fund where you think you can do that. >> itb is the symbol.
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the i shares, home instruction. instead of picking up just th one home builder, this gives you a basket of home builders. you basically play the entire sector without buying into one specific stock. >> all right. you told me about another etf. a very clever ticker symbol, moo. you really can't go wrong. you look at corn, soy beans, etc., they're going through roof because of the drought. also qe-3 makes commodities real assets go higher. these companies will help you come out faster, stronger, better. these companies have been beaten down. >> this week, there was a survey of fund managers, 58% of them said stocks are overvalued. but they still have more to go? >> if you look at the p.e. ratio, which is the price to earnings, which is the way you value a market or a stock, very low compared to where it's been historically. i think you want to be in the
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market now based on valuations, based on qe-3, based on the fact that the cnn greed is very high, there's a lot of money on the sidelines. once the average investor starts pouring it back in, you'll see a big rally. >> the signs are flark greshing, but you're not afraid. coming up next, qe has downside. a roman's rant on who's getting hurt. americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪
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honda accord. it starts with you. we just talked about how to protect your money in the stock market. the feds moved to pump money into the economy has been great
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for people with cash and the time horizon to invest aggressively. what is the fed doing? let's cue this clip. it's pay by ben bernanke throwing money out of the window as fast as he can to bandage up our poor wounded economy. i'm not making fun of fed chief. it's just a cute picture. i think what the federal reserve is doing is necessary. but let's acknowledge the cl collateral damage here. savers are getting killed. this is people who did the right thing, put their money away for a rainy day. now they're nearing retirement and inflation is devouring their nest egg. the average rate on a one-year certificate of deposit, .3%. a savings account, oh, my gosh, a paltry tenth of one percent. i get that the fed had to act. it's arguably helping helping keep the economy afloat, but let's be clear. qe-3 and qe-1 and qe-2 for that matter are not helping everyone and could be hurting some of

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